the public's willingness to expand government would have the same effect on money
we hold the majority of US debt
Sure, but why? (I'll get to that in a minute.)
regardless of who "controls" the money, as long as there IS a medium of trade and the public CHOOSES to expand government, you'll see the same thing. the people would just allow the government to borrow more and owe them money, like we see today
Again, I disagree.
First of all, if we're talking about a deflationary currency out of the control of government, then your premise completely contradicts the traditional arguments against deflationary currencies (i.e. people won't invest because it's better to just hold on to their money). So if they won't invest, then why are people lending to governments? In other words, the governments better offer one hell of a return on that investment if they are going to convince people to part with their deflationary currency.
So, lacking government control of money, why would people invest in their government voluntarily? And regarding taxation, even if the government was able to efficiently collect taxes on another form of money, the inability to inflate it will still kept them small.
This is why governments don't like currency competition.
This post was edited on 4/28 at 2:59 pm